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2016 (3) TMI 119 - ITAT MUMBAI

2016 (3) TMI 119 - ITAT MUMBAI - [2016] 52 ITR (Trib) 74 - Undisclosed sales - gap between the stamp value and the actual sales consideration - buyer of the property categorically denied having paid any such amount to the appellant - addition on bases of loose papers - Held that:- It is difficult to accept the case of the AO that for a property whose sale deed has already been duly registered with the concerned authorities on 23.9.2005, the cash component, if involved any, would be paid as late .....

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tamp value was more, there was exchange of cash between the parties, unless some more cogent contrary material is brought on record. - Lastly, we find force in another argument of the ld. Counsel that even if, although denied by the assessee, it is assumed that cash was received by the assessee, the same could not have been brought to tax in the year under consideration since the entire sales consideration of impugned property sold by the assessee has been received and booked by the assessee .....

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ad received any cash amount. Thus we find that the addition made by the AO is not sustainable as per law and facts, and therefore, the same is directed to be deleted. - Decided in favour of assessee - ITA No. 5935/MUM/2011 - Dated:- 12-2-2016 - Shri Saktijit Dey, Judicial Member And Shri Ashwani Taneja, Accountant Member For the Appellant : Shri Vijay Mehta For the Respondent : Dr. Promod Nikalje ORDER Per Ashwani Taneja, AM This appeal is filed against the order of Ld Commissioner of Income Tax .....

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fiable for another reason that the stamp authority had also confirmed the market value at ₹ 17.64 Lacs i.e. the amount at which the concerned property was sold to the buyer. 2. During the course of hearing, arguments were made by Shri Vijay Mehta on behalf of the assessee and Dr. Promod Nikalje on behalf of the revenue. 3. The brief facts relating to the issue before us are that the assessee is a real estate developer and engaged in construction of buildings. Return of income declaring tot .....

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ed inventorised as Annexure A-1 and A-2 from 5, Divyang S.B. Singh Marg, Mumbai and as Annexure A-1 to A-7 from office at 1102, Silver Arch B, New Milat Nagar, Andheri (W), Mumbai. On verification of the documents and loose papers it was found that certain documents pertained to the affairs of the assessee company. The assessment was completed u/s. 143(3) of the I.T. Act by the A.O on 30.12.08 determining the total income of ₹ 45,77,600/- after making addition of ₹ 40 lakhs on the ba .....

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pounded during the course of survey action . 2. The said addition has been made on imaginary basis/ conjectures and surmises is further supported by the fact that the ld DCIT has not invoked any action i.e. neither invoked sec. 68 nor sec. 69 nor sec. 69A nor sec.69B nor sec. 69C and therefore wrongly added the said amount to the total income. 3. The Ld. DCIT has wrongly correlated the said noting with the sale transaction of sale or flat no.1003 and wrongly concluded that it represents cash com .....

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ced hereunder:- Kindly refer to the above. 2.0 In this connection, the undersigned was directed to carry out the following: a. to furnish a copy of statement recorded, if any, of Shri Mukesh Prajapati and Shri Humayun Rangila regarding the entry of ₹ 40 lacs. b. If no statement was recorded, to examine Shri Prajapati and Shri Rangila on oath and furnish a report on the alleged payment of ₹ 40 lakhs. 3.0 In pursuance to remand proceedings, Shri Prajapati and Shri Humayun were enquired .....

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n admitted fact that the diary was maintained by Shri Mukesh Prajapati. However, he submitted on oath that he does not remember anything about the entry. The words mentioned in the entry are sales, cash, 1003, Rangila, 40 lacs', which undisputedly prove that the amount of ₹ 40 lacs was cash sales to Mr. Humayun Rangila in pursuance of sale of flat no. 1003. The submission of Mukesh Prajapati and Shri Humayun Rangila are untenable in view of the speaking evidence. In view of the above, .....

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rt and reiterated that no cash has been received by the assessee with respect to the sale of the impugned property. 5. The ld. CIT(A) considered the remand report of the AO and the submissions of the assessee but he was not satisfied with the submissions made by the assessee and on the basis of the facts brought out it was concluded by him that the assessee has received amount in cash of ₹ 40 lakhs on sale of the impugned flat and thus he confirmed the order of the AO and dismissed the app .....

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ore any addition could be made on the basis of this document. No such information or corroboration could be gathered by the lower authorities and, therefore, no addition could have been made on the basis of the dumb document like this. ii) The sale deed was registered on 23.9.2005 i.e. in the preceding financial year, whereas the AO has alleged that as per the seized document cash was paid on 15.5.2006 i.e. in the impugned financial year. It has been submitted that it is inconceivable and unimag .....

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basis of high stamp value alone it cannot be concluded that there was receipt of cash in the transaction. iv) Ld. Counsel has made a statement at the bar that no action was taken and no addition was made in the hands of the purchaser viz. Mr. Humayun Rangila. The ld. DR could not controvert the statement of the ld. Counsel in this regard. v) Ld. Counsel made an alternate submission that without prejudice to the earlier submissions, in case it is held that cash was received by the assessee, then, .....

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ollowing judgments:- a) DCIT v. Tejas Constructions, Jalgaon, ITA No. 934/PN/2009 dt. 31.1.2012 (ITAT, Pune) b) ITO v. Karda Construction Pvt. Ltd., ITA No. 971/PN/2011 dt. 31.7.2012 (ITAT, Pune) 7. On the other hand, the ld. DR submitted that there are ample evidences to show that cash has been received by the assessee on sale of the impugned property. He has relied upon the detailed reasoning given by the ld. CIT(A) for upholding the action of the AO and requested for upholding the order of th .....

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ry which is claimed to be maintained by Shri Mukesh Prajapati, Accountant of the assessee company. During his examination by the AO in the remand proceedings, no concrete information could be elicited by the AO from Shri Prajapati which could have thrown some light about the nature and details of these scribbling. The AO also examined the purchaser i.e. Shri Humayun Rangila. He also refused to have paid any amount in cash. No useful information could be elicited in his statement recorded by the .....

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e on 23.9.2005, whereas the impugned seized document is part of the diary dt. 15.5.2006 as has also been accepted by the AO at page 4 of the assessment order. The relevant paragraph of the AO s order is reproduced hereunder for the sake of ready reference: 4. A-2 Page no. 48 This page pertains to dt. 15.05.06 there is entry of ₹ 40 Lacs cash against Rangila below sales 1003. 10. It is an admitted case of the revenue that noting was done on a page dt. 15.5.2006. In our opinion, it is diffic .....

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between ₹ 15 lakhs to ₹ 19 lakhs. Thus, there was clearly a gap between the stamp value and the actual sales consideration. Thus, no conclusive inference could be drawn that merely because the stamp value was more, there was exchange of cash between the parties, unless some more cogent contrary material is brought on record. 11. Lastly, we find force in another argument of the ld. Counsel that even if, although denied by the assessee, it is assumed that cash was received by the asses .....

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